Saturday 2 July 2011

European Council: ”Ambition and additional efforts”

In the blog post 'European Council Res Gestae (SGP & EU2020)' 29 June 2011, we looked at how the great men recorded their deeds with regard to the Stability or Convergence Programme and the National Reform Programme (NRP) of each EU member state.

In the entry 'European semester: ”More of the same” (European Council)' 1 July 2011, we noted that the summit gave its approval to the new planning instrument and prepared the road for future rounds (paragraph 1).

The blog post also tried to provide interested readers with relevant materials for further study.

We return to the relevant conclusions of the European Council, wrapping up the first new style planning cycle called the European semester (pages 2 to 4):

European Council 23/24 June 2011: Conclusions (EUCO 23/11; 16 pages)

For those who want a detailed, but clear overview of the issues of economic governance in the European Union, I recommend the memorandum mentioned in the previous blog post:

EU Economic governance: a major step forward; 31 May 2011, MEMO/11/364

Progress and challenges

The second paragraph of the European Council conclusions referred to the assessment by the Commission:

2. Based on the assessment provided by the Commission, the European Council discussed the policies and measures presented by Member States. These constitute a good starting point for sustaining Europe's recovery, for addressing fiscal challenges and for driving more ambitious reforms at national level. The European Council notes the clear determination of all Member States to do everything that is required to fully implement the Stability and Growth Pact. Member States have made good progress in defining action to attain the headline targets and goals of the Europe 2020 Strategy for jobs and sustainable growth. Some of the targets are on track but others (concerning employment, energy efficiency, R&D, poverty and tertiary education) require additional efforts. Priority should also be given to ensuring a sound macroeconomic environment, restoring fiscal sustainability, correcting macroeconomic imbalances and strengthening the financial sector.

Country-specific recommendations

The press release 'Delivering on growth and jobs: Commission presents 2011 country-specific recommendations' (7 June 2011 IP/11/685) was published in 22 languages, containing advice for the coming twelve to eighteen months.

There is one set of recommendations for the eurozone as a whole and 27 ones for the individual EU member states.

The memorandum published in the working languages of the Commission, English, French and German, provides more information, including on the papers published:

2011 Country-Specific Recommendations in the context of the European Semester: Frequently Asked Questions (7 June 2011 MEMO/11/382).

The memo explained why five countries received only one recommendation each:

Specific recommendations have not been addressed to the five Member States in receipt of financial assistance from the EU and IMF: euro area countries Greece, Ireland and Portugal and non-euro area countries Latvia and Romania. The assistance these countries are receiving is tied to the fulfilment of ambitious, tailored policy programmes focused on fiscal consolidation and structural economic reforms. The priority for these five Member States is to implement the programme as agreed, hence the single recommendation for each of them to do so.

For the same reason, Portugal and Greece have not submitted Stability Programmes this year.

The memo contains general observations about the Stability or Convergence Programmes and the National Reform Programmes (EU2020), as well as procedural information.

On the face of it, we can see that the European Council conclusions were more or less in line with the Commission findings at a general level, acknowledgeing the national programmes, but calling for more ambitious measures with regard to both public finances and Europe 2020 reforms.

Ecfin web page

On a single web page 'Stability and Convergence programmes (or updates) and National Reform Programmes 2011...', the European Commission's DG Economic and Financial Affairs (Ecfin) manages to provide links to Stability or Convergence Programmes, National Reform Programmes, Commission Staff Working Papers and Commission Recommendations. We are still waiting for the Council to adopt its formal recommendations, following the benign nod from the European Council.

Ralf Grahn

P.S. Yesterday, Poland took over the presidency of the Council (of ministers) of the European Union.

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